Digital Licensing and DSPs (Digital Service Providers)
Live performances have traditionally given artists the greatest opportunity for making an income. Whether an independent signed or unsigned artist, the greatest payoff was traditionally seen via concerts and live gigs. The current infrastructure of the internet and specifically digital service providers like Spotify, Youtube, etc., have created a large opportunity for independent artists to make money without stepping foot on a stage. The transition away from money-making radio and record sales, only available for mainstream artists, has cultivated opportunities for independent artists to create and produce on their own while making money.
Graphic displaying various digital service providers that independent leverage to make their music known.
Merlin
Merlin is the largest digital music licensing partner for independent artists. They are member-led and member-owned and their membership consists of independent labels, distributors, and other rights holders globally. Merlin has premium deals with about 40 digital music services like Apple, TikTok, Triller, Youtube, Twitch, and more. It’s free to join with flexible participation for as low as a 1.5% admin fee as part of a trade association which offers numerous services like professional development programs, representation in the media, and connecting members with key industry partners.
Official Merlin logo.
Deals between DSPs and the majors are made individually or with Merlin, the global digital rights collection agency for the independent-label sector. In 2019, Merlin paid over $2b to its members, who represent thousands of independent labels and distributors; it licensed more than 25 DSPs on a global basis. In 2019, 54% of Merlin members reported that digital income accounted for more than 75% of their overall business revenues (Towse 1469).
Twitch
A notable income opportunity for independent artists, through Merlin, is the recept partnership deal with video game live streaming giant Twitch. In this mutually beneficial partnership, independent artists can leverage Twitch’s live streaming ecosystem and in turn how those artists will bolster Twitch’s vision to expand further into content beyond gaming (“Twitch Partners”). Through Twitch’s new music incubator, The Collective, independent artists will embark on an intensive educational opportunity with emphasis on optimizing earnings on Twitch. Other offerings that correlate directly to conversions include prioritized discovery, promotions, anf activation forms Twitch, Rolling Stone, and Amazon Music (Twitch).
Official Twitch logo.
Bandcamp
Bandcamp is arguably one of the best platforms for independent artists to showcase their music. With their user-friendly and artist-forward revenue model where artists net 82% of every sale, it enables independent artists to reap the benefits of their work. In only two years, Bandcamp has generated more than $70m of sales for artists and labels and is closing in on $1b of payments to artists and labels since its inception (“Fortnite”). This past March, Epic Games acquired Band Camp as they make strides towards building out a creator ecosystem for gaming, music, content, and art. Epic’s mission aligns well with Bandcamp, such that they strive to support creators around the world by giving them the tools to connect with and monetize directly from fans.
Graphic announcing the new partnership between Epic Games and Bandcamp.